THE Ministry of Defence is poised to award a £4 billion contract to create a unified computer system for Britain’s armed forces to a consortium headed by EDS and Fujitsu Services.

The Defence Information Infrastructure (DII) project is one of the world’s biggest technology contracts. It is intended to enable better communication between 100,000 civil servants and the 200,000 personnel in the Army, Royal Navy and Royal Air Force.

Creating a single network from the profusion of systems in use is initially expected to create about 2,000 jobs. The winning Atlas consortium has worked with the Welsh Development Agency to ensure that the project will create business for 20 small and medium-sized firms in South Wales.

The award of the contract — the culmination of a three-year procurement process — is a coup for EDS. The American company has been battered in the past by bad publicity over problems with the systems it created for the Department of Work and Pensions and the Inland Revenue.

The Atlas consortium also includes Logica CMG, General Dynamics and EADS, with IBM and HP in more junior roles.

The losing Radii consortium was led by CSC of America and included BT Group and Thales. Some members of the Radii consortium sensed they had lost the bid in recent days, although the MoD has not yet formally told them.

A Ministry of Defence spokesman refused to confirm that EDS and Fujitsu had won and added: “We will be making an announcement in due course.”

The new system is intended to provide everything from battlefield communications to information on salaries and pensions. It will connect 150,000 desktop computers and laptops.

At the moment, even sending an e-mail between different parts of the armed forces is not straightforward, because there is no single directory.

The contract includes a failure clause to ensure that if any one member of the consortium fails to fulfil its role, another will step into the breach. This recognises the importance of the DII system.